Shelley v. Eccles

• Decision Date: 29 September 1922
• Docket Number: 5645.
• Citation: 283 F. 361
• Parties: SHELLEY v. ECCLES et al.
• Court: U.S. Court of Appeals — Eighth Circuit

283 F. 361

SHELLEY v. ECCLES et al.

No. 5645.

United States Court of Appeals, Eighth Circuit.

September 29, 1922

This action was brought by the plaintiff in error to recover damages for a breach of a contract which he alleges was entered into by him through his agent, T. W. Shelley, and by the defendant in error L. R. Eccles. The District Court sustained demurrers to the original and amended complaints and finally rendered judgment upon demurrer to the fourth amended complaint. The question presented on this writ of error is whether that complaint sets out a cause of action. The essential averments are as follows:

The plaintiff owns 2,400 acres of land (as described) adapted to the successful growing of sugar beets near Shelley, Idaho and on the market for sale as farming land, and 200 acres additional in and adjoining Shelley; the portion thereof in the town being platted into lots, blocks and tracts and on the market for sale as residence property. In order to create a demand for all of said property, the plaintiff contracted in person and through his agent, T. W. Shelley, with farmers for the growing of sugar beets during three years upon about 5,000 acres near Shelley, and in connection with a sugar factory would have caused a bridge to be constructed across Snake river to lessen the distance between the lands west of the river and the factory, and thus further increase their value. It was understood between the plaintiff, through his said agent, and defendant Joseph M. Eccles, at the date of their contract for the construction of a sugar factory, that it would be operated in conformity with the beet-growing contracts, and that the profit plaintiff was to make was the value the factory would add to his lands, and for that purpose the plaintiff, through said agent, and the defendant entered into a written contract.

This contract, made nominally between T. W. Shelley, as seller, and Joseph M. Eccles as purchaser, recited that, whereas, the seller has procured about 225 agreements from various persons near Shelley obligating them to raise and deliver for three years about 5,000 acres of sugar beets, and the seller desired to sell and the purchaser to buy those agreements, it was agreed the seller would assign them to the purchaser, who was to pay the expense of obtaining them. The purchaser agreed to form a corporation under the laws of Utah, with a capital stock sufficient to erect a sugar factory at or near Shelley, on a site to be mutually agreed upon, ready to manufacture beet sugar from beets grown in 1917, according to the contracts with growers. The construction of the factory was to begin in 1916. The purchaser was to provide beet dumps at certain railroad stations named. He reserved the privilege of inspecting the lands, and if a certain minimum was reached the construction of the factory was optional with him.

Prior to the contract, plaintiff's agent informed the defendant that he was such agent in the negotiations for and the making of the contract, that the plaintiff owned the lands, that they were adapted to beet growing, that he was promoting the factory for the purposes aforesaid, and he informed the defendant generally of the purposes and ends the plaintiff intended to accomplish by the contract. In the negotiations and contract, the defendant acted for himself and his codefendant, L. R. Eccles. Additional beet growing contracts were obtained. The lands were inspected and accepted. Thereafter a factory site was mutually selected and agreed upon at a specified place on the east bank of Snake river, near Shelley and plaintiff's lands. The cost of obtaining the growers' contracts was paid as agreed, and they were assigned to the defendant Joseph M. Eccles. The corporation was formed. All of the terms and conditions of the contract were performed by the plaintiff.

The defendants have not constructed or operated the factory, or caused it to be done by a corporation, at said site, or as agreed. Sugar factories have been built and operated in Snake river valley, where plaintiff's lands are located, increasing the value of lands adapted to beet growing from $25 to $75 an acre. If the factory had been erected and operated as agreed, a demand would thereby have been created for plaintiff's lands, lots, and tracts, and he would have realized from them $516,500; whereas, without the factory they were not worth over $316,500. Wherefore, he was damaged to the extent of $200,000.

Mahlon E. Wilson, of Salt Lake City, Utah (W. H. Holden and E. M. Holden, both of Idaho Falls, Idaho, on the brief), for plaintiff in error.

J. H. De Vine, of Ogden, Utah (J. A. Howell, David L. Stine, R. C. Gwilliam, and J. D. Murphy, all of Ogden, Utah, on the brief), for defendants in error.

Before CARLAND and LEWIS, Circuit Judges, and COTTERAL, District judge.

COTTERAL District Judge (after stating the facts as above).

The fundamental rules on the subject of damages resulting from a breach of contract are, of course, not in doubt, and do not call for repetition. As frequently occurs, a chief source of controversy lies in their application to a given case, and particularly where a recovery is sought for the loss of anticipated profits. That they may be...